California utilities implement new EV charging rate structures

Utilities in California are implementing diverse rate structures to manage the increasing electrical load from electric vehicle (EV) charging. San Diego Gas & Electric (SDG&E) has introduced a revised EV-TOU-5 plan, effective August 1, 2026, for residential customers. This plan features a significant six-to-one price gap between super-off-peak and on-peak electricity, with super-off-peak rates at 13.1 cents per kilowatt-hour compared to 80.2 cents during peak hours.

The new SDG&E structure includes midday windows on weekdays and extended windows on weekends to align charging with surplus solar generation. This move aims to redirect demand away from peak hours when the grid is most strained.

In the commercial sector, utilities are grappling with demand charges, where billing is determined by a single highest 15-minute power spike rather than total consumption. This can lead to massive cost fluctuations for fast-charging stations. While much of the United States continues using traditional billing models, California's major utilities are experimenting with different approaches. For example, Southern California Edison has implemented energy-only commercial EV rates without demand charges through the end of 2029.